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The Recent Reform of the Labour Market in Italy: A Review

Author

Listed:
  • Dino Pinelli
  • Roberta Torre
  • Lucianajulia Pace
  • Laura Cassio
  • Alfonso Arpaia

Abstract

Italy undertook a major reform of the labour market in 2014-2015 (Jobs Act). This paper provides a compendium of the key changes introduced. The analysis shows that the Jobs Act has contributed to bringing Italian labour market institutions more closely into line with international benchmarks and with the principles of flexicurity. Employment protection legislation for permanent contracts has been brought into line with that of major European partners, although it remains more restrictive than the OECD average. The focus of passive labour market policies has shifted from job to worker protection, which will facilitate the reallocation of workers to more productive occupations. The designed strengthening of active labour market policies would improve job matching and reduce structural unemployment, but thorough implementation remains the key factor for achieving this critical goal. Extending the new rules on employment protection legislation also to existing permanent contracts and the strengthening of the collective bargaining framework could be considered as a follow up to the recent reform. Flanking measures to open product markets and reform the public sector are crucial to deliver the entire potential impact of the reform.

Suggested Citation

  • Dino Pinelli & Roberta Torre & Lucianajulia Pace & Laura Cassio & Alfonso Arpaia, 2017. "The Recent Reform of the Labour Market in Italy: A Review," European Economy - Discussion Papers 2015 - 072, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
  • Handle: RePEc:euf:dispap:072
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    References listed on IDEAS

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    Cited by:

    1. Rita Chiesa & Luca Fazi & Dina Guglielmi & Marco Giovanni Mariani, 2018. "Enhancing Substainability: Psychological Capital, Perceived Employability, and Job Insecurity in Different Work Contract Conditions," Sustainability, MDPI, Open Access Journal, vol. 10(7), pages 1-10, July.

    More about this item

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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